The Coalition’s £14 billion flagship plan to insulate millions of British
homes and cut bills is in jeopardy, after major energy companies halted work
on the project.

Ministers hope to launch the Green Deal to householders this October, but a dozen firms wrote to Nick Clegg to say they are putting their efforts on ice.

Around 14 million households are meant to get loft and wall insulation under the Green Deal at no upfront cost, but Labour claims the project is “spiralling out of control”.

David Cameron was last month so concerned about problems with the Green Deal that he called in its critics for crisis talks at the Cabinet Office.

The letter to Mr Clegg will be a further blow to the credibility of the scheme, which has been criticised for being too complex and expensive.

In the letter, companies said they are “holding off development further” until the Government gives them £240 mllion to fund the scheme. But so far the Coalition has refused to agree when or even if this money will be paid.